First, we’re so sorry for your loss. This can be a very challenging time for many reasons, and dealing with property ownership is tough at the best of times.
You’ll quickly realize the countless decisions you’ll have to make regarding the inherited property.
Most people find that the property they have inherited is actually creating the most stress for them when dealing with managing all aspects of an estate. Like many inherited property owner’s you’re probably thinking “What improvements should I do to the house?” or “How do I sell the house as-is and maybe by owner?”
Some people decide to renovate the property themselves to get the sweat equity out of the property. However, it is important to be realistic at this point as to the amount of time and energy you are willing to commit to fixing the property up.
Many inherited property owners we have purchased homes from have decided to sell the property as-is after starting a renovation because they have become overwhelmed with the entire renovation process. Save yourself the headaches and hassle of remodeling up front by getting an AS-IS offer from an investor.
We’re seasoned investors in Chicago real estate, and we’re looking to buy several houses each month in the Chicago IL area. Every month we get calls from those who have inherited a house and are looking to sell the house… so the info below are some tips to help you navigate the process.
I Inherited A House, What To Do Next?
Here’s a few important considerations to help you make the right decision:
1) Make sure the mortgage is paid.
This may sound obvious, but if the person who left you a property also had a mortgage (unless it had no mortgage and was paid off, which is great!), you have to pay it (assuming you want to keep the property). Some banks will allow you to assume the loan, while others may force you to refinance into a new loan. If you don’t qualify for a new loan, renting may not be an option for you.
2) The investment is only as good as the manager.
If dealing with brokers, maintenance, tenants, rent collection and all the nuances of property management isn’t the best use of your time, hire a professional to help you or cash out now. Some people who inherit homes decide to keep the house and rent it for extra income. That’s a great strategy for sure. You just need to be prepared to manage the property and the hassles that can go along with tenants and toilets.
3) Property ownership costs money.
It’s rare to see a building that’s been perfectly maintained. Most inherited houses need major improvements.
Consider hiring a professional property inspector to give you a detailed rundown on what you’ll need to do within the next five years, along with estimated costs. Surprises are very, very expensive.
4) Selling a property for top dollar costs money.
If you don’t want to deal with making repairs, updating kitchens, improving landscaping and overall cleanup, don’t worry. We buy Chicago houses for cash, as-is.
5) If the market will continue to grow faster than your other options, hang on to the investment.
We can help you analyze the value of your property today versus the long-term benefits of renting. If you can use the equity in your property in another way that outpaces the performance of the real estate market, you should. If you don’t have anything better to do with the money and the neighborhood is rising in value, hang on – real estate can be a great investment if you know how to correctly read the market.
6) Uncle Sam wants a piece of the action.
Don’t forget to discuss your inheritance with tax and legal professionals before you take action. There are major property and income tax consequences that will dramatically impact the cost of owning your investment.
7) Consider all your options.
In certain situations we may be able to help you structure a lease-option agreement that allows you to rent and sell at the same time – capturing the best of both worlds. These kinds of deals can be complicated, but our Elmhurst investment experience can help you win.
8) Compare a few scenarios.
We’ll help you determine prices for any property near Elmhurst – if you sold it today without doing any work, the highest price the market will bear, and the projected value of keeping it as a rental (along with the costs).